Base salary – Definition, what it is and concept

The base salary is the amount of money set by agreement between parties that a person earns as a result of their work done during a certain period of time.

In other words, the base salary is the fixed and principal amount of a salary. Thus, it is usually the most important part of the total salary. While it is true, that depending on the type of work performed, the supplements or plus may be greater. For example, a person can have a base salary of $ 800 to which supplements should be added. These supplements may be related to productivity, overtime, seniority or obtaining certain extraordinary results.

Types of supplements to the base salary

On the base salary, generally, what is known as salary supplements acts. These are granted to employees, fundamentally, to keep them always motivated. The reasons or circumstances that lead the company to grant these salary supplements are varied. However, we will classify them into the following types:

  • Complements based on the characteristics of the work itself: This is taken into account if the work is done at night, due to the danger of a job being performed. It can also be for certain objectives. How can it be to increase the sale of a certain product.
  • Complements based on what each employee represents: Here certain skills and knowledge are possessed. Thus we have mastery of more than one language or specific knowledge of certain classes activities within the company. Many times companies also consider the time or seniority of the employee in the company etc.
  • Complements based on the economic results achieved by the company: Many times the company when they manage to exceed their goals as an organization, grant benefits to employees.

So the base salary can be increased by a high percentage. Generally, these supplements represent an additional salary between 30 and 35%. That is to say, that to the base salary the companies usually add additional complements which lead to an improvement in the quality of life of the worker.

Clearing some doubts about the base salary

The base salary that a person can receive is achieved as a result of the negotiation between the company and worker. The granting of a specific job is accompanied by an employment contract. Contract in which a series of clauses have been established. Among these, will be the level or amount of the base salary to be paid.

Salary supplements are mostly at the discretion of the company. Even if some terms have been clarified in the negotiations. Given that companies generally promise certain complete as company policy.

Base salaries may be greater than or equal to minimum wage. Remember that minimum wages are legally established by the State of a country.

Something important to note, in terms of differentiation between wages, is that the base salary is different from the net salary. Since the net salary is the one we have left once the taxes have been deducted.

Sample base salary

Assume an employee who works in a chemical factory. His total salary is $ 1,500, but how is that salary distributed?

  • Base salary: 900 dollars
  • Supplement for risks associated with chemical products: 300 dollars
  • Complement for seniority in the company: 200 dollars
  • Extra hours made this month: 100 dollars.

If we add the amounts we would have a total amount of $ 1,500 of gross salary. To which later, it would be necessary to reduce taxes, social security contributions, etc.